LTC PROPERTIES EXHIBIT 99.1
Published on February 10, 2003
Exhibit 99.1
LTC Properties, Inc. Comments on
Discussions with Sun Healthcare Group, Inc.
OXNARD, Calif.--(BUSINESS WIRE)--Feb. 7, 2003--LTC Properties, Inc.
(NYSE:LTC) announced today that it has commenced discussions with Sun Healthcare
Group, Inc. ("Sun") (OTCBB:SUHG) relating to skilled nursing facilities LTC
currently leases to Sun. Sun indicated that it has identified nine facilities in
five states leased from LTC that it believes are not in line with Sun's
long-term geographic and strategic initiatives. Sun further advised LTC that Sun
would not be making February lease payments on these nine facilities, and has
requested that LTC terminate the leases on these nine facilities. Sun has issued
its own press release today concerning these matters.
The nine leases Sun has requested to terminate represent as of December 31,
2002, approximately 8% ($45.8 million) of LTC's net book value of real estate
investments. LTC stated that the leases underlying these nine properties
represent approximately $4.1 million in annual lease payments. LTC is in
discussions with alternative operators for some but not all of the properties
and is in the process of identifying potential operators for the remaining
properties. However, at this time there can be no assurance that LTC will be
able to enter into satisfactory arrangements with respect to these properties.
Based on facility operating statements provided by Sun as of December 31, 2002,
these nine facilities had a lease coverage ratio of 0.6 times.
Sun indicated its intent to continue leasing four other facilities from LTC
and retain two other facilities financed by mortgages that are in a securitized
mortgage (REMIC) pool originated by LTC. Sun has paid February rent payments on
the four facilities and February loan payments on the two mortgaged facilities.
LTC stated that the net book value, as of December 31, 2002, of the four
LTC facilities that Sun intends to retain is approximately $10.3 million, 1.9%
of LTC's net book value of real estate investments and generate approximately
$1.4 million in rental income. Based on facility operating statements provided
by Sun as of December 31, 2002, these four facilities had a lease coverage ratio
of 2.3 times.
As of December 31, 2002, the balance Sun owed to the REMIC on the two
mortgaged facilities they intend to retain was approximately $6.0 million and
based on facility operating statements provided by Sun as of December 31, 2002,
these facilities had a debt service coverage of 1.1 times.
LTC has not reached an agreement with Sun on Sun's request and cannot
quantify the financial impact on its earnings for 2003 or whether there will be
an impairment in value of the nine properties. LTC currently is evaluating its
rights under the applicable leases.
LTC Properties, Inc. is a self-administered real estate investment trust
that primarily invests in long-term care and other health care related
facilities through mortgage loans, facility lease transactions and other
investments.
The Company has investments in 95 skilled nursing facilities, 96 assisted
living residences and one school in 30 states.
This press release includes statements that are not purely historical and
are "forward looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended, including statements regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. All
Statements other than historical facts contained in this press release are
forward looking statements. These forward looking statements involve a number of
risks and uncertainties. All forward looking statements included in this press
release are based on information available to the Company on the date hereof,
and the Company assumes no obligation to update such forward looking statements.
Although the Company's management believes that the assumptions and expectations
reflected in such forward looking statements are reasonable, no assurance can be
given that such expectations will prove to have been correct. The actual results
achieved by the Company may differ materially from any forward looking
statements due to the risks and uncertainties of such statements.
CONTACT: LTC Properties, Inc.
Andre C. Dimitriadis/Wendy L. Simpson, 805/981-8655
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